Increasingly frequent flooding in places like Sydney may be cause for concern, but Australia is still doing fairly well in the real estate space. Image: The Property Tribune; Henry Thai.
  • Australia and Japan are the most resilient to environmental risks
  • Most of Asia and the Pacific have set 2050 targets for decarbonisiation
  • Australian cities lead the way with green building adoption

A new report has found Australia is one of two countries to be most resilient to environmental risks.

That might seem like a tall tale for those in flood-affected areas in New South Wales, flood victims in Brisbane, and those trying to get insured against flooding, or just trying to find an house; indeed many homes are not suitable for the current climate crisis Australia is going through, with calls for more flood-proof housing in Australia.

Is Australia a carbon emissions leader?

The new report comes from CBRE Research: Asia Pacific Sustainable City Ranking. Created to improve transparency around how cities and the built environment can reduce carbon emissions, the report benchmarks cities in the Asia Pacific based on environmental resilience.

Cities are evaluated on several factors including:

  • Carbon targets,
  • Transition risk,
  • Physical climate risk,
  • Water stress,
  • Air pollution,
  • Renewable energy,
  • Green bonds, and
  • Green buildings.

The two axes of the rankings are status (measurement of status) and momentum (measurement of the pace of momentum) with respect to the above indicators.

Twenty-eight cities across 14 markets in the Asia Pacific were ranked, with leaders including the Australian cities of Perth, Melbourne, Brisbane, Canberra, and Sydney, along with Seoul, Ho Chi Minh City, Osaka, and Tokyo.

Asia Pacific Sustainable City Ranking

Source: CBRE Research.

CBRE’s report comes as the Asia Pacific region accounted for over half (53%) of the global emissions of last year and has been responsible for an overwhelming majority (80%) of the global growth in carbon emissions over the past decade.

As for the question of Australia’s leadership on carbon emissions? It depends on how you want to look at things.

In the report, the carbon emissions peak and net zero targets were assessed, with Australia having reached its carbon emissions peak in 2007.

Market Peak Net Zero 
Australia 2007 2050
New Zealand 2013 2050
Japan 2013 2050
Hong Kong 2014 2050
Taiwan 2017 2050
Korea 2018 2050
Singapore 2030 2050
Malaysia 2050
Vietnam 2050
Mainland China 2030 Before 2060
Indonesia 2030 2060
India 2040-2045 2070
Thailand 2030

Source: CBRE Research, Asia Pacific Sustainable City Ranking.

With regards to progress, the report found that only Australia, Japan, Korea, and New Zealand are expected to make significant progress towards emissions reductions in the coming decade.

The report

Among the key takeaways from the report, much of the real estate sector in what the report refers to as emerging Asia has “considerable room to improve”; Japan and Korea are leading the transition to a low-carbon economy.

Among the natural disasters countries are most likely to face, the report found floods, typhoons, and earthquakes were the most common threats.

Singapore is under the most pressure for water stress due to its dependence on rainfall and lack of natural water resources.

Worryingly, only 10 cities have acceptable air quality, or to put it another way, 18 cities have air pollution that exceeds the acceptable threshold according to the WELL standard; this is despite WELL setting a higher threshold in relatively more polluted regions.

Green buildings are progressing well, the report found green building adoption in Asia Pacific stands at 43%, and 63% for new buildings. Australia and Singapore are leading the way with regulations, all new buildings in Australia and Singapore are required to meet certain green standards.

Moving forward

Decarbonising will look different for different cities, hence one recommendation being more bespoke solutions.

As the region continues along a path of rapid urbanisation and economic growth, the variability of environmental performance across Asia Pacific markets requires commercial real estate occupiers and investors to tailor their Environmental, Social, and Governance (ESG) strategies to local market factors rather than adopt a one-size-fits-all approach, according to CBRE.

“Investors should differentiate their ESG strategies for mature markets like Australia, Japan and Singapore, it’s a must to invest in green buildings and green financing capital should be prioritised to fund sustainability projects. Other markets in Asia Pacific are catching up quickly and investors should emphasise green due diligence when making new acquisitions or upgrading older property stock, especially with most new completions being green certified assets,” said Dr. Henry Chin, Global Head of Investor Thought Leadership, Asia Pacific for CBRE.

Brisbane, Canberra, Melbourne, Sydney and Perth are all ranked as Leaders, with Su-Fern Tan, Head of ESG, Pacific for CBRE, noting a large rise in the use of sustainability benchmarking tools.

However, Ms Tan said there was still unrealised opportunity in the form of green leases and potential for property owners throughout the Asia Pacific region to “do better” or face costly physical and transition risks.

“Given that most nations have 2050 net zero targets, our supply of renewable energy is currently limited. On the plus side this presents a massive opportunity for utilities to accelerate our transition to a clean energy future,” Ms Tan said.

City rankings

Australian state capitals like Brisbane, Canberra, Melbourne, Sydney, and Perth, along with Japan’s Osaka and Tokyo were all considered leaders, with a high level of green building adoption, growing levels of renewable energy use, and less physical climate risk.

Ho Chi Minh City was also a top performer in the leaders category, the city was noted for its high adoption of renewable energy and low level of water stress.

Seoul rounded out the leader category, with kudos to its low carbon economy and high level of green adoption for recent office completions.

For solid performers, Auckland, Hong Kong, and Singapore featured, for their strong environmental sustainability credentials, however improvements are “generally bound by geographical limits”.

The improvers category includes megacities like Beijing, Shanghai, and Jakarta, with the cities seeing “modest improvement” on environmental sustainability.

While these cities have targets after 2050, Jakarta was commended for nearly all recent office completions being green-certified.

Potential performers included Chengdu, Guangzhou, Hangzhou, Shenzhen, Bangalore, Chennai, Mumbai, and New Dehli.

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